How to Apply For a Loan Cost-effectively ?


Nowadays, young families may be trapped in the dilemma of inadequate money and excessive expenditure, and they can't make ends meet, the problem of which can be well solved by loans.

If you want to buy a house or a car now, as well as some major expenses such as luxury items and tourism to improve the quality of your life, you can borrow money for consumption first, and then repay it slowly in installments. These are the three most common loans among young families, namely, mortgage, loans for cars and loans for daily consumption .


The biggest advantage of a loan is that it can relieve the financial pressure of your family. When you are short of money, the loan can help you solve the urgent payment problem. At the same time, it can set aside cash flow for your family in case of emergency.

However, although loans can relieve economic pressure, it is not recommended that people can borrow money for everything, especially consumer loans. We need to have the common sense and logic of loans  that we often encounter in our life.

First of all, people who have already bought a house or plan to buy a house need to know how to repay the mortgage in a cost-effective way.

What repayment methods should your family choose?

First of all, what you care most about should be interest. From the perspective of family affordability, the income of young families is fixed, and average capital, which is under great pressure to repay in the early stage, has a heavy economic burden for them. So equal principal and interest is a repayment method more suitable for them.


After setting the repayment method, the next step is the repayment plan. How can repayment be cost-effective? We need to figure out the portfolio loan most economically.


Take commercial loans, which are bank loans, for an example. You can choose the 30-year equal principal and interest method, pay the lowest down payment, and then set the monthly payment as the upper limit of your monthly salary. Because at this time, you must be a young man who has just joined the work for a few years, and it is easy to be promoted and raised in a few years, and inflation is likely to follow. Therefore, the monthly repayment amount, which is under great pressure now, won't be a problem in a few years.  


The point is, if you get a promotion and a salary increase next, don't repay in advance, but use the money to do financial management, fund or bank financial management, and use it when investment opportunities appear or your family needs money.

Next, there is a question. What should we do if we regret the loan?

Some families who have already applied for loans may find that their loans are expensive, and other banks can offer lower interest rates. At this time, you can also consider refinancing, that is, transferring the remaining loan balance to a bank with lower interest rates. It should be noted that, from a cost-effective point of view, lending depends not only on the interest rate, but also on the expenses incurred when handling lending.